OS 10.4 - "Startup Disk almost full" but I have 242 GB free?!

When i try to export an illustrator file (ai) to photoshop (psd), I get the message "Your Startup Disk is almost full. Please free up space..." and then illustrator gets the rainbow wheel and no progress is made. I end up having to force quit illustrator, after which my system runs unbelievably slow until I restart my computer.

The thing is: My startup disk is not almost full. I have 242 GB free on my hard drive. So, what could the problem be?

I'm working on iMac OS 10.4.11. Photoshop gives me the same error, but my start up disk isn't full. I have nearly 200GB available, though yesterday it was 250GB and I have not installed or transferred 50GB of data to the HD.
Is the problem with the HD or something in Photoshop?
Thanks,
Dave